Redfin and Others May be Less "Disruptive" Than Once
Thought

The disrupters watch for next-level disruption.

(Mountain Lakes, NJ, October 5, 2017) — Fresh off a successful debut on the stock market,
Redfin founder Glenn Kelman
took something of a victory lap at this summer’s
Inman Connect conference in San Francisco.

Redfin has opened offices nationally with a strategy of
paying salaries to agents
and charging sellers a fee of just 1 percent or 1.5
percent, depending on the market. That rock-bottom
level of commission makes sense on a $400,000 or
$500,000 sale, but not on entry-level homes.

"We still haven’t figured out how to make money
selling a home that costs less than $200,000," Kelman
said. "Making money selling a $150,000 home is
hard."

That might be good news for traditional brokers who see
Redfin as a threat. The median price of a home sold in
the United States in July was $258,600, meaning a large
share of transactions fall outside of Redfin’s
wheelhouse.

Even a disruptive broker like Kelman frets about being
displaced himself. "We worry about Google and
Facebook rolling over the whole real estate
industry," Kelman says.

But real estate consultant Stefan Swanepoel sees an
upside to the real estate industry’s long-lamented
fragmentation and lack of standardization.

That might be the very thing that has kept the real
estate industry from being
taken over by Amazon or another consolidator.

"We are not a commodity," Swanepoel told the
Florida Realtors annual convention in August.